POTSDAM -- The Village of Potsdam has set a tax cap hearing for Monday since its proposed 2016-17 budget would hike the amount raised by property taxes by 7.6 percent and the property tax rate by 3.75 percent, exceeding the state property tax cap guideline.

Village Clerk Lori Queor explained that an increase in the value of property -- higher assessments -- allows the village to raise 7.6 percent more money than last year without increasing the tax rate more than 3.75 percent.

The village wants to raise $3.48 million from property taxes for next fiscal year compared with $3.24 million in this year’s budget.

Since the cap provisions went into effect in 2012, the village board has managed to keep their tax levy under the property tax cap until this year.

In the last few years the village has depleted its reserves and earned the unfortunate distinction of being the most fiscally distressed municipality in the state, according to the comptroller.

Meanwhile the tax levy increase limit, originally set at 2 percent but tied to inflation, is actually lower this year because inflation has been low, further restricting a municipality's flexibility.

The state program demands that the local governing body must have a vote of at least 60 percent of its members to exceed the limit. That would be three members of the village board, which comprises four trustees and the mayor.

The hearing will start at 6:30 p.m. Monday in the board room, followed by the regular board meeting, at which the board is expected to approve the override in several steps.

First is the mandated annual budget hearing, where public comments will be heard.

That will be followed by a hearing on the local law enabling the override, scheduled to start at 6:50.

Then during the regular board meeting, set for 7 p.m., the board will vote on amending local law to include the new cap for the 2016-17 budget.

No date has been set for a vote on adoption of the whole budget, but it has to be approved, by law, by May 1.